12 Mar 2020

Can Australia Close the Gender Gap on Superannuation?

Gender equity, Elizabeth Foley
Can Australia Close the Gender Gap on Superannuation?

Gender Equity in Superannuation: Rebalancing for 2030

According to the latest Financy Women's Index, the superannuation gender gap in Australia recently clocked in at 28 percent. Women's financial progress is surely not where we'd hope in 2020, but this report illustrates notable improvement (2015-2016 report noted a 34% gender gap). In fact, the gender gap has actually decreased by half since 2004. With the current momentum, women could have balanced superannuation with men in about eleven years. But, is that truly good news? The gap is closing, but not fast enough. Financial inequality is impeding women's progress...and do we really want to wait until 2030 for balanced finances? For the last twenty years, Australia's gender pay gap has hovered between 15-20%, which means even with increasing legislation and growing awareness women are still paid less than men in many industries.

 

HOW DOES THE GENDER GAP IN SUPERANNUATION FACTOR INTO OVERALL FINANCIAL WELLNESS?

What if I told you that being a woman leaves you with $90,000 less on average in retirement? The pay gap has left working women significantly behind in retirement savings. The predicted retirement income gap of 39% leaves women at $262,000 to men's $432,000. There are two main causes of these unbalanced superannuation balances: the gender pay gap and women's time off from the paid and full-time workforce. In addition to being paid less, research has shown financial literacy in Australian women tends to be lower than men. This means that the effects of lower superannuation balances have a greater impact on women's financial future and could threaten their economic security in retirement. In order to have more balanced long-term retirement outcomes for all Australians, the super system could use some retooling. 

 

WHAT ARE THE FACTORS THAT CONTRIBUTE TO WOMEN’S SMALL RETIREMENT INCOMES?

There are several factors that make up the bulk of the pay gap issues. Women are more likely to undertake the role of childcare. When your work patterns are fragmented, that eliminates significant value from your average retirement savings. For example, taking as little as five years off could shave over $100,000 off a woman’s retirement savings. And caretaking responsibilities are not the only thing that’s taking a chunk out of women’s wallets. Women work many part-time and casual worker jobs that are lower paid positions. Administrative roles, sales, and community services are women-dominated professions with lower salaries than male-dominated ones. Men take up most senior executive and board level positions. To makes things even more complicated, women not only retire earlier than men, they live longer!

 
 
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GENDER EQUITY IN SUPERANNUATION: WHAT ARE THE SOLUTIONS?

The solutions to gender equity in superannuation cannot be solved on the individual level. Government action and corporate cooperation is the only way to balance the scales. Some possible solutions include increasing employer super contributions to 12% and paying super on parental leave. Tax recalibrations would also increase fairness.
 


ACHIEVING GENDER BALANCE IN PROJECT MANAGEMENT

Women have overcome many obstacles in project management, but like many other fields, there is much room for improvement. Women still make up low numbers in most project-based industry sectors. However, research already shows that diverse teams are proven to be more effective. As project-based organisations face challenges of increasing skill shortages, leveraging gender diverse talent will assist with meeting this demand. Taking on the pay gap is no simple task, but there are many things you can do to help make it better for women in the workplace. Although changing retirement savings regulations and legislation is not up to the individual level, we’re not off the hook. Each person is still responsibile for contributing to better gender balance in the workplace.
 
Here’s three quick tips to helping achieve gender balance in project management:
 

1. Stop Forcing Women to Choose Between Their Family and Career

Having a family or caring for children does not make a woman any less capable as a project manager. Examine how your workplace treats women with families. What about pregnant women? Work environments that force women to consistently prove their loyalty to their career over family are key contributors to the pay gap issues.
 

2. Encourage Women to Excel

We’re all familiar with the phrase, “If you’re not part of the solution, you’re part of the problem.” Imposter syndrome and the pull of societal expectations can cause women to not seek out appropriate compensation or promotions at work. It can also cause them to shy away from leadership or senior positions. Encourage woman in your workplace to excel. If you’re in a senior management position, mentor a woman on the leadership track. Create a working mother’s support program. Explore childcare assistance options. Allow women to shine and acknowledge their wins. Carve a path for balance.
 

3. Champion Flexible Working

Advocate for flexible working within your team or organisation. Flexible working allows women to contribute to the workforce without needing to choose between family and their career. It also keeps them within the workforce longer, increasing retirement contributions and decreasing work gaps.
 


AS A WOMAN, WHAT CAN I DO?

Know your worth. Being aware of what you bring to the table is key to getting paid on par with men. Don’t settle. Negotiate pay and don’t accept the first offer. Make sure you research your role and factor in experience and skills to know how much you should be paid. And of course, support organisations that are trying to spread awareness with social media shares and shout outs.
 


GENDER EQUITY IN THE WORKPLACE: WHAT NEEDS TO CHANGE

To commemorate International Women’s Day, we published a report to identify changes required to bring gender equity to the workplace. As well as childcare reform, we include building a work culture that values women, closing gender-defined gaps in pay and superannuation, and breaking down the gender dominance (both male and female) that characterise many sectors and industries. The full report is available to review here. 
 

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WRITTEN BY ELIZABETH FOLEY, CEO OF AIPM